At 1% of GDP, UK market overtakes Japan, just behind US
The UK insurance market overtook Japan in 2007 to become the second largest global centre for insurance after the US with 11% of global premium income, trade association International Financial Services London claimed.
.In fgures out yesterday, the group said this was due to a combination of:
faster growth of new long-term insurance business in the UK than in Japan;
better performing equity markets during the year in the UK; and
faster growth of the UK economy.
Premium income of the UK’s insurance industry increased by a fifth in 2007 to a record £263bn, largely due to an increase in occupational pensions premiums and to a smaller extent to an increase in life insurance premiums, the report said.
The impact of the credit crisis on the UK insurance market has so far been limited according to the report. New long-term premium income for the first three quarters of 2008 shows an 11% drop on the same period in 2007. “Several of the UK’s largest insurance companies have made public the state of their capital and their exposure to potential further falls in bond and equity markets, demonstrating that their position is sound,” the group said.
Gross premium income on the London Market was conservatively estimated at £24.5bn in 2007, slightly up on the previous year's total. Lloyd's generated over two-thirds of premiums with the company market generating just under a third and P&I Clubs the remainder.
Insurance accounts for 1% of UK GDP, excluding brokers and linked professions. The industry employs more than 325,000 people, including 50,000 in the London Market. Insurance net exports increased by a third to £5.5bn in 2007. Funds under management of insurance companies totalled £1,600bn, almost double those of any other European country.
